Real estate sales in Alberta are off as much as 30% to 40% from a year ago and listings are way up — the worst thing you could do right now is panic. Here’s some advice from the experts

]]>http://business.financialpost.com/financial-post/what-to-do-when-the-housing-boom-turns-to-bust/feed/0stdreducedNational Post View: The government must reexamine its role in the housing markethttp://news.nationalpost.com/full-comment/national-post-view-the-government-must-reexamine-its-role-in-the-housing-market
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Is the Canadian housing market headed for a crash? The answer to that depends on who you ask.

In December, the Bank of Canada warned that house prices were overvalued by as much as 30%. Then, in February, Capital Economics economist David Madani publicly stood by his 2011 prediction that the housing market would lose 25% of its value.

The International Monetary Fund (IMF) added its own warning last week, describing the Canadian economy as “vulnerable” to “overheated housing markets and high household debt.” Analysts Hamid Faruqee and Andrea Pescatori observed that “house prices have risen more than 60% nationwide since 2000,” but that “Canada’s overvalued housing market may be cooling off.”

Yet the very next day, Royal Bank of Canada CEO David McKay gave a speech in New York saying everything is fine. “A lot of the price inflation that you’re reading about in the Canadian housing market is largely driven by lack of supply in single-family homes, strong household formation, strong immigration numbers — so demand is still there,” said Mr. McKay. “We feel good about the Canadian housing market.”

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People have been warning about a housing bubble for years, of course, and Canadians can be forgiven for being skeptical. We certainly aren’t making any predictions. But one thing is certain: If the housing market does crash, the Canadian taxpayer will get the bill for cleaning up the mess.

Under Canadian law, any mortgage issued by a bank with less than a 20% down payment is required to be insured. And by far the largest provider of mortgage default insurance is — surprise, surprise — the Canada Mortgage and Housing Corporation (CMHC), a Crown corporation that operates under the full faith and credit of the federal government.

The CMHC guarantees 100% of the loans it insures; the federal government is liable for any of its losses. In fact, the government has had to step in and bail out the CMHC twice. If we do experience a severe downturn in the housing market, a 2011 report from Capital Economics estimated that taxpayers could be on the hook for as much as $10 billion.

As we saw in the lead-up to the housing collapse in the United States — when Fannie Mae and Freddie Mac were issuing mortgage-backed securities with an implicit guarantee from the U.S. government — such guarantees, by offloading the risk of default onto the government, incentivize lenders to issue bad loans. Heads they win, tails the taxpayer loses.

In order to counter this problem, the federal government has been steadily tightening the standards under which mortgages are eligible for CMHC insurance. Although it would have been preferable for the government to get out of the business of backstopping mortgages and allow lending standards to be determined by the market, the government’s solution was certainly better than nothing.

But whether these changes have actually reduced the risk borne by Canadian taxpayers remains unclear, as the new measures do not seem to have cooled the housing market. Neither have they done much to scale back the amount of risk assumed by the Canadian public.

The amount of mortgage loan insurance the CMHC has in force has decreased from $566 billion at the end of 2012, to $546 billion in the third quarter of 2014. But it is still quite close to its legislated limit of $600 billion, and its private-sector competitors have been gaining significant market share as of late. (Ninety per cent of the value of the loans insured by the private insurers is also backstopped by the government, but that only kicks in if the companies themselves go bust.)

The IMF says Canada would “benefit from reforming the government’s role in mortgage insurance and reducing taxpayers’ exposure to the associated risks. Limiting the federal backstop would increase private sector risk sharing and can further encourage prudence.” It is high time the government reexamined its role in the housing market, reducing its exposure and spreading the risk of any future instability in the market throughout the economy.

VANCOUVER — Chinese buyers are snapping up some of the most exclusive real estate in the Lower Mainland. The latest jaw-dropping sale was a $51.8-million mansion on three lots, one of which overlooks the ocean.

The Point Grey home was owned by Don Mattrick, the CEO of social gaming company Zynga and former head of Xbox at Microsoft, and his wife, Nanon De Gaspé Beaubien-Mattrick, a tech investor and heiress to a Canadian telecom fortune.

Land title documents show the property, which boasts a 10-car garage, sold in mid-December to Mailin Chen, a businessman from mainland China, and his Vancouver-based company, Chunghwa Investment (Canada) Co. Ltd.

Chunghwa Investment was incorporated in March 2010 and has an office on Howe Street in downtown Vancouver. No one answered phone calls there. A Mandarin-speaking assistant at Chen’s personal Yaletown office said he was not available. A phone call to the home at 4787 Drummond Drive, which is now listed under Mailin Chen’s name, was also not answered.

Chen has bought and sold other luxury properties in Metro Vancouver in the past, including selling a $10.5-million Shaughnessy home at 1550 Laurier Ave. in December. According to land title documents, the purchaser of that home was restaurateur Ling Xu.

Vancouver Luxury Real EstateBack of the house at 4787 Drummond Drive in Point Grey, Vancouver, which sold recently to a Chinese buyer for $51.8 million.

The Drummond Drive sale, which was not listed and not conducted by real estate agents, is one of the richest in the B.C. housing market. It comes as agents say the market is hopping with interest from buyers with cash from mainland China. These include Canadian citizens, residents and visitors. (Starting in 2012, Chinese nationals could apply for a 10-year, multiple-entry visa, giving them new mobility to travel and buy property here.)

The $51.8-million price for the house on Drummond Drive was almost as much as the most expensive Vancouver home, which is assessed at $57 million and owned by Lululemon founder Chip Wilson.

But there is similar clamouring for prime properties on a smaller scale in other pockets of the local real estate market.

Recently, a house at 1383 West 32nd Avenue in Shaughnessy went into contract for $8.01 million, or $2 million over the asking price of $5.99 million.

In West Vancouver, 118 houses were sold in February, compared to 63 the year before for an increase of 87 per cent. Of homes in the $4 million and higher category, agent Clarence Debelle of Royal Pacific Realty estimates some 75 per cent went to buyers with ties to mainland Chinese money.

Vancouver Luxury Real EstateThe entry of a Point Grey mansion in Vancouver that sold for more than $51 million.

The burst of activity is due primarily to wealthy Chinese, some of whom live in Canada but keep or earn money overseas, and others in China who are looking to buy abroad.

They are motivated by conditions such as low interest rates and the Canadian dollar’s decline against the Chinese yuan, which is linked to the U.S. dollar and is up 18 per cent over the past 18 months.

Vancouver Realtor Manyee Lui puts it into a working person’s math: “If you were looking at a house that was $800,000 Cdn. (in yuan terms), now you can look at something for $1 million Canadian.”

Other factors are the weakening economy in China and the entrenched political battle to root out corruption. Escaping the polluted skies of China’s cities has long been on the list of reasons to get out, but, in more recent weeks, this has been heightened by the release on the Chinese Internet of Under The Dome. The film, made by a former Chinese state television reporter, is told from the perspective of parent of a young daughter. It struck an emotional chord while condemning the country’s weak environmental protections.

Vancouver Luxury Real EstateThe swimming pool of a mansion recently sold in Vancouver for $51 million.

The phenomenal flow of Chinese money is not only coming to Vancouver, but other desirable real estate markets in the world. This is pushing up property values and leading to increased scrutiny of the provenance of some of the cash leaving China.

Between 2002 to 2011, US$1.08 trillion in capital has left mainland China illegally, according to the most updated report by Global Financial Integrity, a U.S.-based group.

Technically, there is a US$50,000-a-year limit on cash that can be taken out of China, but buyers have long got around this by using friends and relatives to move chunks of money under different names. Some also tack personal cash onto legitimate export and import transactions by using fake invoices.

Vancouver Luxury Real EstateSitting room at 4787 Drummond Drive in Point Grey, which sold recently to a Chinese buyer for $51.8 million.

Canada does not have rules about foreign ownership of real estate and does not track purchases as such.

In Australia, which has also had a rush of Chinese money into prime Sydney properties, overseas buyers are only allowed to purchase newly built properties with permission from the Foreign Investment Review Board. Last week, the government there ordered an Australian company, owned via shell companies by China’s Evergrande Real Estate Group Ltd., to sell an A$39 million ($37.8 million Cdn.) Sydney mansion it had purchased, calling the original purchase illegal.

A beautifully renovated mansion in Santa Monica, California has hit the market for US$23-million.

Originally designed by architect-to-the-stars Peter Choate, the nearly 10,000-square-foot home has five bedrooms, seven bathrooms, two living rooms, and a wine room that can fit over 800 bottles.

“I fell in love with this house and what it could be the moment I saw it,” Sandra Brass, the owner who had the mansion renovated and is now selling it, told Douglas Elliman. “I felt that, with a thoughtful eye to the right balance of reinvention and restart, this property had the potential to be truly remarkable.”

Outside, the contemporary home has a large salt water pool and spa, fire pit, and lots of open space. It’s also right next to the Riviera Golf Course so it has gorgeous views of its rolling greens.

Ann Eyrsing of The Agent is co-listing the property with Tracy Tutor Maltas of Douglas Elliman.

Business InsiderThe home has an open floor plan and two huge living room areas.

Business InsiderThe luxury home was originally built by famous architect Peter Choate and recently renovated.

Business InsiderFor just $23-million this mansion can be yours.

Business InsiderThe luxury home was originally built by famous architect Peter Choate and recently renovated.

Business InsiderThe kitchen has a central island, eat-in area, and doors that open out into the backyard.

Chander Chaddah remembers how crazy and irrational things appeared that day. He and a client went bank book to bank book with two other bidders in a bidding war to end all bidding wars, or so they thought, because what they thought at the time was: this is insane.

It was a house in a centrally located Toronto neighbourhood, with a big park and access to public transit nearby, and it was the fall of 1996, an era where bidding wars over houses were unheard of in the city.

Mr. Chaddah, a veteran realtor, expected his client to walk away with the $199,000, 2½-storey gem, for about $10,000 less than the asking price.

“My guy ended up paying $211,000 for it and he was really p—ed off,” he recalls.

Today, that poor guy’s house — and he still owns it — is worth well over $1-million. A monumental sum, only not so much in Toronto, where the average price — average price — for a detached home in the city proper officially hurdled over the $1-million mark ($1,040,018 to be precise) for the first time in a calendar month, according to the Toronto Real Estate Board.

So, what does it all mean?

“People used to think they were rich when they had a million-dollar house,” Mr. Chaddah says. “But that is not remotely the case anymore.”

Not in Toronto, where, aside from a blip in 2008-09 when the global recession had buyers spooked and home prices momentarily dipped about 10%, it has been a bull market for almost 20 years.

Photo courtesy Lance Van Der KolkThis three-bedroom, three-bathroom Leslieville home is listed at $999,990. It's located on a relatively narrow lot: only 7 meters wide. The houses exterior has been professionally landscaped, and the inside was recently renovated.

For $1-million, a would-be Toronto home shopper can, for example, peruse the listing for 46 Ivy Ave. sprinkled with exclamation marks (“a private drive and garage!”). Should they buy, they will get a renovated place with a main-floor “powder room” and a stucco exterior in a scruffy, gentrifying neighbourhood.

There are train tracks near the house, as well, along with a major intersection where sketchy-looking characters have been known to make sketchy-looking financial transactions with other sketchy-looking characters. But get beyond the drug dealers, and you get a foot in the front door of the Toronto market.

Of course, there are alternatives. For example: moving to Saint John, N.B., stomping ground of veteran realtor Katherine Bacon.

That is spelled b-a-c-o-n, Ms. Bacon says with a laugh, like “ham and eggs” or “Kevin Bacon.”

Photo courtesy Katherine BaconThis waterfront home is located on 10 acres, including a partially-cleared wooded area. The house has a wrap-around, covered veranda. It's 6,500 square feet, has four-bedrooms and boasts an indoor pool as well as five fireplaces.

“For less than a million dollars I can get you a home on the ocean with a private beach,” she says: $948,000 buys a 6,500-square-foot waterfront palace on Apple Manor Lane, featuring a heated indoor pool, a hot tub and four working fireplaces.

In Regina, a shopper with a $1-million-plus budget can get 159 acres, two tractors, a five-bedroom house — and, importantly, a two-car heated garage. In Ottawa, a buyer might find a stately Edwardian-style home in the Glebe, while in Windsor, Ont., seven figures net a dwelling with a nouveau-riche spiral staircase, a wet bar and a pond out back.

In Calgary, you get heart palpitations, presumably, as the oil boom goes bust and companies shed jobs. Sales of homes fell 30% in January and February, from the same period last year, while prices dipped about 4% in February.

Photo courtesy Robert Marland
This Ottawa home was built in 1916, and the original woodwork is in tact. The six-bedroom home overlooks Patterson Creek. The house also features four bathrooms, and its kitchen has a butlers pantry. However, the basement remains unfinished.

Photo courtesy Krista Sojka This 2,000 square-foot East Van home has five bedrooms and two baths. The house has views of the iconic North Shore Mountain. According to the real estate agent, Krista Sojka, the house has multiple offers, and will sell for well over the asking price of $1.1 million.

And in Vancouver, sigh, you get … attitude.

“Toronto has some catching up to do,” says Krista Sojka, with a laugh, noting Vancouver housing blew past the $1-million threshold several years ago.

More than 100 would-be buyers traipsed through a recent open house she hosted in the city’s east end for an old working-class cottage, price $1,080,000. It has sloped ceilings in the upper bedrooms anyone taller than 4-ft-8 could concuss themselves on, were they not careful.

“It was crazy,” Ms. Sojka says.

Her advice to new clients: “Look east.” And by east she doesn’t mean Toronto, but the Vancouver suburbs. To places like Maple Ridge and Coquitlam, where for a mere $800,000, a family can still buy a house with four bedrooms and a yard, not some charming shotgun shack in Vancouver proper.

There is always a lot of talk about buying real estate; discussions around the water cooler mainly reference open houses viewed the weekend before, price comparisons of similar houses in different neighbourhoods and whether or not the closing date might be right. But what about when you’re selling? That’s a whole different experience, with a whole different set of talking points.

This new column will focus on the selling side; it will look at ways to optimize your return through planning and preparation. Send us your questions and we’ll connect with agents and other experts for advice you can use. We’ll look at decluttering, paint colours, whether to create two large bedrooms out of three small ones, the necessity of a main-floor powder room, boosting curb appeal and anything else your home might be in need of prior to listing.

Royal LePage’s House Price Survey out this week says that across Canada, a standard bungalow rose 6.7% to $406,218, a standard two-storey home rose 6% to $43,379 and a standard condo rose 4.5% to %257,624. In Toronto, arguably the country’s hottest market, a standard two-storey home rose 8.6% in the fourth quarter of 2014 to $745,062 and condos rose 6.9% to $384,680. It forecasts a 4.5% increase across the board in 2015 for the city.

“The social and economic factors that have influenced the Toronto market in recent years remain unchanged,” Gino Romanese, senior vice-president at Royal LePage says in the report, “so it is reasonable to expect we will see continued price appreciation in 2015.”

However, other parts of the country are starting to feel the effects of lower oil prices and modest job growth. The Canadian Real Estate Association said December sales were down from the previous month in almost two-thirds of all local housing markets, led by declines of about 25% in Calgary and Edmonton. Calgary alone has seen a jump of 39% more listings in the past year.

Traditionally, more listings come onstream for the spring market, regardless of local activity. Having your home optimally primed for sale can mean beating those new listings to a quicker, and likely higher-priced, transaction. Many realtors offer staging as part of their service, but because there are elements of a home that may require longer-term preparation, it pays to have both broader insight and specific advice well before you’re ready to list.

Aaron Vincent Elkaim for National PostAnne Bourne created a stylish vignette for a nook in the condo.

This may be the most important thing to know: “No one wants to buy your dirt or your work,” says Anne Bourne, the owner/operator of Toronto-based StagingWorks.

“Buyers want to purchase a home that is move-in ready.”

It’s said that many buyers decide on a house within the first 90 seconds. They won’t stop to ask about the details if the appearance doesn’t grab them right away. Making that great first impression is all-important.

“Home staging is ensuring a property looks its very best in order to get the highest price in the shortest amount of time,” Ms. Bourne says; this can involve everything from minimal decluttering and rearranging of furniture to opening up a space, painting, replacing light fixtures, refinishing kitchen cabinets, and then finally lacing the home with new furniture and accessories.

If your house or condo needs extensive work, the fix could take several weeks or more. Costs, of course, vary, depending on the size of a property.

Ms. Bourne adds that “properties that are cluttered, dirty, a bit rundown may not even get buyers in the front door. People search online before seeing a home in person…

They will be most excited to see the ones that look like they have been well-maintained and cared for.” (Renovators may be the exception, and the minority.)

A well-presented home unquestionably stands out from one that isn’t. Here’s a how-to for the staging process:

Get references from friends, family and your agent. This is vital, as the staging industry is unregulated, so you could end up with a look that does more harm than good.

Ask if they’re insured, and get references.

Then, “generally speaking, the actual staging takes a day or two,” Ms. Bourne says. “We can bring in a crew of several assistants and movers to turn around even a large property in one day. This assumes any other work and decluttering is completed before the staging day.”

Most professionals follow this process when determining what work needs to be done:

Consultation — A home stager walks through a space to assess its needs. The stager will prioritize changes based on budget to ensure maximum return on investment.

They’ll discuss whether to rid your house of the children’s toys, the dog bed, the hot rod in the driveway. Can you leave the wedding photos on the sideboard? Should you hide that water stain on the wood floor with a potted plant? Maybe you’ll discover that what you thought would need changing, doesn’t. Trust the experts.

Clean Up — This is where the hard work is, and could involve everything from painting and fixing the property inside and/or out. Maybe they’ll suggest you replace your old windows, or cut back the landscaping or fix the cracked path. Then, you’ll pack up your clutter (er, personal and beloved possessions) and take the boxes to off-site storage. Unless you have thousands of square feet to spare, removing boxes from the house is the best policy.

Staging Day — The home stager brings in whatever new furniture and accessories necessary to create the most sellable look for the most likely buyer demographic; it will work with your existing decor, unless the entire house has been emptied. They work to ensure each space looks as large and as inviting as possible. It may not be your look, but go with it — it’s no longer about you, it’s about the buyer. You can live with it a while.

Once the paperwork is signed and there are no more househunters coming through your place, the staging materials are removed and your own stuff is returned (just know, you may like the new look so much, you may not want it back).

“As soon as you are serious about putting your house on the market,” Ms. Bourne says, “have a home stager walk through your space and do a consultation. Depending on the neighbourhood and the type of potential buyers, stagers are able to put a plan together to ensure that the target buyer is going to fall in love with your home. How a gorgeous downtown condo is staged is completely different than the property around the corner from the school in Leaside.”

Have a question about prepping your home for resale? Email us at primedproperty@gmail.com

On Monday, this editorial board urged Calgary city council to finally permit Calgarians to establish so-called “secondary suites” within their private homes. A secondary suite is the legal term for an apartment in the basement or over the garage of an existing house. Such accommodations are the norm across North America — many of us take our first steps as independent adults by moving into such an apartment. They provide affordable, conveniently located housing for those who need it, and income for home-owners. For seniors on a fixed income who wish to remain in their home for as long as possible, renting out the basement can make all the difference in the world.

Calgary, however, is an outlier. Secondary suites were made legal in new real estate developments several years ago, but while they are theoretically permitted in some zones of the existing city, each application must, incredibly, be reviewed by city council itself. The net effect of this is that Calgary, a booming city of almost 1.2 million, has only a relative handful of the suites. It also has the second-highest average rental price for an apartment and the lowest vacancy rate of any major city in Canada. Simply put, the population is growing faster than housing can be built to accommodate them. This squeeze falls hardest on young adults and those living on low incomes. People are being frozen out of the market and the chance to live in one of Canada’s great cities.

This is especially frustrating because the solution is obvious. In a rare alliance of necessity, Calgary’s business community has aligned with affordable housing activists and student groups to demand that something be done. This is a problem entirely created by the city government and its policies. It could be solved just as easily.

But it hasn’t been. Council has considered this issue closely for almost a decade. A whopping 33 reports have been commissioned. Polls have been taken (a clear majority of Calgarians want secondary suites made legal). And still, nothing happens. On Monday, after an all-day council session, councillors voted against making secondary suites legal for the entire city, by a vote of eight to seven. Mayor Naheed Nenshi, who has rightly been championing this cause for years, has thrown up his hands and declared that the status quo will endure. The best that could be said is that council agreed to commission four more reports on various aspects of legalizing secondary suites.

Four more to add to the 33 that have come before them. Meanwhile, Calgary’s economic prosperity, not to mention the future prospects for residents looking for a home and citizens trying to stay in theirs longer, will continue to be threatened by a shortage of affordable housing, a shortage that the city government is responsible for and could easily address. An estimated 16,000 illegal secondary suites are already available on the black market, which is an absurd situation. People need a place to live. Let them do it legally.

It is time for Calgary to get out of the way of its residents. It is reasonable for the city to regulate building codes, parking availability and safety issues. It is not reasonable for it to be an obstacle to the continued growth and well being of a great city. Enough reports. It’s time to take action.

National Post

]]>http://news.nationalpost.com/full-comment/national-post-editorial-board-how-not-to-solve-calgarys-housing-problem/feed/0std<> on July 8, 2009 in San Francisco, California.Jesse Kline: Get the state out of the basementhttp://news.nationalpost.com/full-comment/jesse-kline-get-the-state-out-of-the-basement
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Despite falling oil prices, Calgary’s population is expected to grow by 40,000 people a year for the foreseeable future. With a rental market vacancy rate hovering around 1%, the question is: how to house all these people?

Since he came to office, Calgary Mayor Naheed Nenshi has advocated legalizing secondary suites. The city has some of the most restrictive zoning laws in the country and, in most neighbourhoods, renting out a basement apartment is in violation of city bylaws. Yet, giving private property owners a path to create safe and legal secondary suites in their homes, or elsewhere on their properties, would go a long way to solving the city’s future housing needs and keeping rentals at affordable rates.

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Late last week, Mr. Nenshi pleaded with the city’s business community to support his push to get council to liberalize its policy on secondary suites. “Every other city in Canada has already done it and I can’t quite get there,” said Mr. Nenshi. “There is no question in this city that we have to legalize secondary suites.”

The Calgary Chamber of Commerce responded by sending an open letter to the Mayor and council, which called the city’s affordable housing supply inadequate and advocated for the legalization of secondary suites. “Calgary has the most restrictive land use bylaw regulations pertaining to secondary suites of any major city in Canada,” Adam Legge, the president and CEO for the Calgary Chamber of Commerce told the Calgary Herald. “That is not a leadership position we should be proud of. In fact it is hurting our businesses.”

Hopefully, city council will listen by opening up the rental market to more competition and giving private property owners more control over what they do with their own houses.

The buyer will be able to boast of having a house with its own vineyard, a wine cellar for 10,000 bottles, a waterfall, a bowling alley, a 50-seat cinema, a revolving dance floor and a Turkish spa.

At a price of US$195-million ($220-million CAD), only the richest need apply to buy the most expensive house ever to go on sale in America.

The Beverly Hills estate, nicknamed Palazzo di Amore – or palace of love – comprises a main house that is more than 35,000 sq. ft. – so large that an elevator was installed to save time climbing the vast number of staircases. The dining room table is big enough to host up to 250 guests at a time.

At 25 acres, the grounds will also take a bit of upkeep.

Michael McNamara / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalVisitors must approach down a quarter-mile drive, but can park wherever they like: the garage can accommodate 27 cars and there is on-site parking for up to 150. At 25 acres, the grounds will take a bit of upkeep.

Visitors must approach down a quarter-mile drive, but can park wherever they like: the garage can accommodate 27 cars and there is on-site parking for up to 150. A floating-style glass walkway over pools lined by 70-year-old olive trees leads to the complex, which has limestone floors with marble and maple inlay and hand-painted ceilings.

Neighbours include Eric Schmidt, executive chairman of Google, and the director Ridley Scott. Hugh Hefner and his Playboy mansion are just a mile away.

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Until this weekend, the California property, which is located two miles from the Beverly Hills Hotel, had been rented out for US$475,000 a month.

Now the estate is being sold by the property billionaire Jeff Greene, who paid $35-million for it in 2007 and spent the past eight years and $25-million developing it.

The 59-year-old – a friend of the former world boxing champion Mike Tyson – refers to the Mediterranean-style home as “a palace for the modern era.” Mr. Greene, who married his wife Mei Sze there in 2007 with Tyson as the best man, said he had always intended to sell it, but construction was not completed until last month.

Marc Angeles / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalUntil this weekend, the California property, which is located two miles from the Beverly Hills Hotel, had been rented out for US$475,000 a month.

“True to its name, Palazzo di Amore, this estate has been a labour of love for me,” Mr. Greene said. “In creating a palace for the modern era, I have set the highest standards of craftsmanship and artistry in every detail.”

But the businessman, whose net worth is estimated at US$3-billion, may still end up disappointed: Jonathan Miller, an appraiser with Miller Samuel, was not convinced that it would sell for the asking price: “What’s unusual is the estate size,” he said. “Still, $195-million is a huge number.”

A similarly sized mansion in nearby Holmby Hills sold for US$102-million in March — US$23-million under the asking price after years on the market. If the Beverly Hills home does reach its listing price, it will overtake an 18-acre estate in the Hamptons, belonging to the late Wall Street investor Christopher H. Browne which was sold to an unnamed buyer earlier this year for US$145-million.

Marc Angeles / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalThe estate is being sold by the property billionaire Jeff Greene, who paid $35-million for it in 2007 and spent the past eight years and $25-million developing it.

Marc Angeles / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalIf the Beverly Hills home does reach its listing price, it will overtake an 18-acre estate in the Hamptons, belonging to the late Wall Street investor Christopher H. Browne which was sold to an unnamed buyer earlier this year for US$145-million.

Marc Angeles / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalThe Beverly Hills estate, nicknamed Palazzo di Amore – or palace of love – comprises a main house that is more than 35,000 sq. ft. – so large that an elevator was installed to save time climbing the vast number of staircases.

Marc Angeles / Courtesy of Joyce Rey and Stacy Gottula, Coldwell Banker Previews InternationalA similarly sized mansion in nearby Holmby Hills sold for US$102-million in March — US$23-million under the asking price after years on the market.

Jeff Berwick values “freedom and liberty” and that, he says, makes him an anarchist libertarian. He wears the label proudly. So do his devoted followers, men and women who share his profound distrust of government. “Anyone who wants to see a very free world does not want government,” says the 43-year-old Edmonton native. “I also don’t like being extorted or being aggressed against by others.”

He doesn’t much care for Canada, either. “There aren’t many countries in the world less free,” declares the libertarian guru. North Korea, Cuba, Belarus, the U.S.: That’s about it. Aggressive statism was a big reason he quit Canada in 2003. After losing a fortune in the 2000-01 technologies stock crash, Mr. Berwick sold the Vancouver-based Internet-based financial news service he had founded, embraced “anarcho-capitalism” and then left.

A few years ago he landed in Chile, where, an hour’s drive west of Santiago, he was shown a kind of paradise, an agricultural setting in which a community free of convention and state interference would be built. Or so he thought, and promoted as such.

Mr. Berwick and two partners called their community Galt’s Gulch Chile (GGC), a nod to that freedom-seeking character and enclave depicted in Atlas Shrugged, the classic libertarian novel by Ayn Rand. The partnership secured land, sketched out designs, subdivisions and property lots, and then sold the heck out of it to freedom-starved folk up north. Some forked over tens of thousands of dollars for a slice a freedom they would never see.

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What was supposed to be an unfettered freedom place became a real estate debacle, and, in the words of one observer, “another dumb gringo story.” GGC is now tied up in knots, thanks to internecine bickering and a bungled approach to Chilean laws and local requirements, including zoning permits, water rights and property title. The founding partnership has fractured, with each party threatening to run to the courts — the dreaded state apparatus — for redress.

The ironies aren’t lost on anyone: Bureaucracies and internal dissent reduced a libertarian idyll to pixie dust. Allegations of fraud, rumours of skulduggery started swirling last month. This week, investors told the National Post they’ve been left in the dark. And they want their money back.

“It’s my fault,” says Mr. Berwick.

“We hoped to attract those trying to defect from more unfree countries like the U.S. and Canada to live in a place amongst like-minded people who believe in freedom,” he explained during an interview conducted this week via email.

He used libertarian connections and an investment-related website he edits, The Dollar Vigilante, to promote the Chilean project. In May 2013, he pitched GGC to his readers. Mr. Berwick gave a breathless account of his first visit to a property halfway between Santiago and the Pacific Ocean.

“We were in the the middle of what appeared to be a virtually untouched valley completely enveloped by pristine mountains, rugged terrain, rolling hills and endless vistas. My god, this IS Galt’s Gulch,” he wrote.

Galt's GilchHome page of website for Galt's Gilch in Chilie showing the sign on the property.

He also announced a “special pre-sale” of lots ranging from 1.25 to five acres, with “incredibly hard-to-believe” prices: US$48,500 to $145,000. More remarkable were the “prime estate-sized lots” ranging from 15 to 25 acres, available for $400,000. Purchasers of these larger lots would become “Founder’s Club” members and best of all, they would “recoup from GGC their full purchase price within three years. … Yes, you read that right,” Mr. Berwick gushed.

The $400,000 payments would be considered loans to GGC, to be repaid from revenues from other sources, such as an adjacent 125-acre organic lemon and avocado farm that GGC had apparently acquired.

Wendy McElroy is a Canadian writer and “individualist anarchist and feminist” who lives with her husband on a farm near Owen Sound, Ont. She met Mr. Berwick at a conference in 2012, and he introduced her to the GGC concept.

After conducting “a great deal of research,” Ms. McElroy and her husband purchased an option to acquire a 1.25-acre lot at Galt’s Gulch. She won’t disclose the price. In April, she travelled to GGC for a “celebration” event, and she even gave a speech. Within hours, she says, she and her husband decided to ask for a refund. She claims that zoning applications for GGC had not been filed with local authorities.

“Needless to say, no refund ensued,” she says. Late last month, she went public, publishing on a libertarian news website a devastating account of GGC.

She does not blame the debacle on Mr. Berwick, who, for his part, points an accusing finger at a former partner, Ken Johnson, a California real estate agent. Reached at the GGC property in Chile, Mr. Johnson blames Mr. Berwick. He says things could still work out and GGC may yet be built, but adds that anyone who wants a refund will eventually get their money back.

[youtube=http://www.youtube.com/watch?v=jyL40q7VSBc&w=640&h=390]

For his part, Mr. Berwick now acknowledges he had concerns about the GGC venture and his partnership, even before his aggressive sales promotion began. There were questions about water rights, zoning and land-use restrictions on the more than 6,000 acres of land GGC claimed to have acquired.

“I decided that since I was already roped into this by association I had two choices,” he wrote last month in The Dollar Vigilante, once Ms. McElroy’s account was published. “To stop promoting GGC and go public with the reasons why I was uncomfortable or to continue to promote it and hope it works. I chose the latter and very quickly money began flooding into the project…”

It has not worked out. Mr. Berwick told the National Post this week that he has no role anymore at GGC, and has “no idea what the status is. I have been on the outside looking in for about a year now.”

He’s looking forward to other opportunities, such as Anarchapulco, an international libertarian event he plans to host next February in Acapulco. Just don’t expect to find him back in Canada. “I try to spend as little time there as possible,” he says.

Rapper Jay Z has taken two tours of the hillside aerie with views that sweep from downtown Los Angeles to the Pacific Ocean. The estate was developed by Bruce Makowsky, who made his fortune selling handbags through department stores and the QVC television channel.

“There was a void of homes for super-wealthy people, and that’s why I did it,” Makowsky said while sitting near a curved 16-meter glass wall that slides open to an infinity pool with iPad-controlled fountains. “I don’t think there’s anybody who’s served up $85 million-to-$100 million homes at this level for somebody to step into and buy.”

Makowsky may be the boldest developer of Los Angeles mansions built on speculation, without a buyer in place. He’s betting on growing demand from billionaires, technology magnates and entertainers — a global elite who collect mansions in cities such as Hong Kong, London or Miami, where they alight a few times a year from their yachts and private jets.

“Even though this represents 0.1 percent of the housing market, this kind of a price tag is not out of the realm of possibilities,” said Jonathan Miller, president of New York- based appraiser Miller Samuel Inc. and a Bloomberg View contributor. “About three years ago, this global phenomenon built momentum where luxury real estate has become a new global currency.”

At least 20 U.S. homes have sold for $50 million or more since 2010, according to Miller Samuel. This year, Barry Rosenstein, founder of hedge-fund firm Jana Partners LLC, agreed to buy a home for $147 million in East Hampton on New York’s Long Island in what would be the most expensive deal ever when completed, said Tim Davis, a broker with Corcoran Group Real Estate. Davis sued the sellers in July, claiming he was cut out of the deal and a $8.8 million commission, he said in a telephone interview today.

The highest current U.S. asking price is $139 million for the Le Palais Royal, a 60,000-square-foot (5,600-square-meter) estate north of Fort Lauderdale, Florida, William P.D. Pierce, a broker at Coldwell Banker Residential Real Estate, said in a statement this month.

The sale of the Fleur de Lys mansion for $102 million in March was the most expensive in Los Angeles.

Homes costing in the tens of millions of dollars stand in stark contrast to the dwellings of most local residents. Angelenos use a bigger slice of their paychecks on shelter than people in New York, San Francisco or Miami, studies by economists at Harvard University and Zillow Inc. show. Surging property prices are pushing some lower-income households into converted garages or to move to distant suburbs.

“Clearly, the buyer that I’m trying to attract is a very narrow group of people,” Makowsky said during a tour of the two-story, 22,300-square-foot Beverly Hills home, complete with a vehicle elevator that lowers cars to a glass-walled showroom.

“It’s the super-wealthy people that might own a big mega-yacht for $250 million, or they own a big Gulfstream plane for $100 million.”

Twenty-seven of the world’s 400 richest people live in California, according to the Bloomberg Billionaires Index. Globally, there were about 128,000 ultra-wealthy individuals, who each have at least $30 million of investable assets, a population that grew 12 percent last year, according to the Capgemini-RBC Wealth Management 2014 World Wealth Report.

In addition to U.S. tech, energy and entertainment money, Los Angeles has lured investors from China, Indonesia, Russia, Latin America and the Middle East who use U.S. real estate as a haven from political and economic uncertainty back home, said Alessandro Cajrati Crivelli, the builder of a speculative home listed for $45 million in the Holmby Hills area of Los Angeles.

“If you buy a house for $50 million, $60 million, and it falls to $40 million, it’s still better than having your money under a dictator who decides that money doesn’t belong to you any more,” the Italian-born Cajrati Crivelli said in a telephone interview. “It’s the return of capital rather than the return on capital.”

Makowsky’s luxury abode has attracted interest from shoppers both international and domestic, including the two visits by Shawn Carter, the musician better known as Jay Z and husband of singer Beyonce, according to two people with knowledge of the tours who asked not to be named because the matter is private. Makowsky declined to comment on the visits.

The property at 1181 N. Hillcrest Road, in the Trousdale Estates neighborhood of Beverly Hills, has already received two offers, said Branden Williams, a real estate agent with Hilton & Hyland.

“There’s a very good chance we could get asking or above,” said Williams, who shares the listing with Ben Bacal of Rodeo Realty Inc.

As Makowsky led an hour-long tour of the house, he cited prices and brands of furniture and fixtures, speaking in the patter that made him a QVC star. A 24-person dining-room table has place settings by Roberto Cavalli priced at $3,700 each, and the living room has 10 chairs designed by Bentley Motors that cost $56,000 apiece. A climate-controlled wine cellar is stocked with Dom Perignon and Perrier-Jouet champagne along with Cohiba and Montecristo cigars.

“I want every detail inside of the house to be as good as the view,” he said. “I will tell you because I’m not going to sell you.”

Makowsky and his wife, Kathy Van Zeeland, spent 30 years making handbags and shoes, a business they sold in 2008 to Hong Kong-based trading company Li & Fung Ltd for $495 million, according to a company filing. Makowsky, a Rhode Island native who would say only that he’s in his 50s, built his fashion business in New York before the couple moved to Los Angeles four years ago.

“What I was coming out here for was the lifestyle,” he said. “Happy people, entrepreneurs, not quite the rat race that New York was.”

The couple bought an oceanfront house in Malibu in 2010 for about $15 million. Four months later, they purchased a second home, in Beverly Hills, for $22.6 million. Makowsky jumped into homebuilding after observing the high demand for ultra-luxury mansions in Beverly Hills, Bel Air and Holmby Hills, an area known as the Platinum Triangle.

The Trousdale neighborhood alone has 46 construction sites, according to a city of Beverly Hills report from June.

“I was inspired by the amount of construction I saw out here,” said Makowsky, dressed in a T-shirt, white jeans and black
blazer with white elbow patches by Beverly Hills designer Bijan. “People are really starting to care what their house looks like more than ever — the really wealthy people.”

Makowsky said he’s put money into six residential investment properties so far. He paid $5.3 million in January 2013 for a house above the Sunset Strip that he renovated and then sold for $19 million this past April. He’s updating a Bel Air property formerly owned by Michael Strahan, the retired New York Giants football player, bought last July for $11 million.

Makowsky has three ground-up developments in the pipeline, each larger and more opulent than the Trousdale home, he said.
More Competition

Rather than relying on investors or bankers to finance his projects, Makowsky said he’s spending his own cash.

A growing number of luxury developments and renovations in Los Angeles’s toniest neighborhoods may hurt demand for Makowsky’s houses. On a lot adjacent to his Trousdale estate, a mansion is under construction by another speculative developer, according to Williams, the real estate agent, and several newly built or renovated homes line Hillcrest Road.

“Yes, there is competition, but nobody will invest this kind of money and build this kind of a house,” said Makowsky, who said he has 150 architects, designers and other people working on his projects.

Beverly Hills imposed restrictions on truck traffic in the neighborhood in June “in recognition of the significant levels of construction-related activity” after two police officers were killed by runaway vehicles in separate accidents, the city said in a website posting.

Toward the end of the Trousdale mansion tour, Makowsky headed to the home’s lower level, where a candy wall that cost $130,000 is stocked with $70,000 of jelly beans, chocolates and other sweets. Three flat-screen televisions above a bar show panoramic views from rooftop cameras. Nearby, a turntable in the car showroom displays a two-tone blue Bugatti Veyron next to a black Spyker supercar and a 2015 Rolls-Royce Phantom, which aren’t included in the $85 million asking price.

“I want to create and design things that I am proud of and that people will die for or love,” Makowsky said. “That’s what we did in the handbag-and-shoe business, and that’s hopefully what we’ll do here.”

Top agents know that in a competitive real estate market, having an agent with inside knowledge, one able to give trusted advice, can make the difference in giving sellers the needed edge.

Award-winning agent Sam McDadi of his eponymous real estate firm answers some of the most-asked questions by those thinking of listing:

1. Is it wisest to list in a busy market when more buyers are looking?

Surprisingly, it may be advantageous to list when there are fewer people looking. There are many buyers in the hot GTA market looking every day for a new listing. Many of them have made offers but lost in a bidding war. They may be even more open to expanding their wish list and willing to do some renovation work. With fewer listings on the market, you may actually sell faster and for more.

2. Should the agent hold an “offers day” to generate multiple offers?

It can be risky to demand offers on a certain day. There are times where I highly recommend this strategy, but this would be the exception rather than the rule. It would be best to get counsel from your real estate professional.

3. Should I set my asking price below market price to generate interest and ultimately a bidding war?

In the end, the market will determine what your house is worth, but begin with comparables in the neighbourhood. If you set the asking price artificially low and don’t get the results you were hoping for, you may have potentially damaged your listing. I have been successful with this strategy but again all the conditions need to be in place to implement such a strategy.

Sam McDadi Real Estate Inc.Actress Lupita Nyong'o accepts her Oscar for best supporting actress for 12 Years a Slave.

4. Do professional pictures make a difference?

It’s always beneficial to have the property photographed, because the photos help buyers see more of the property, and sellers get to highlight their home’s best assets. If there’s a bathroom or kitchen reno, I’d put those pictures first, and downplay the weakest assets. Buyers who see an unfinished basement before the dream kitchen may see the house as needing even more work and money and not buy in. But if they see the nice stuff, they may be prepared to make the house part of their long-range plans. Today, with so many buyers searching online, you may only have a few seconds to make an impression. The before-and-after photos in this post are an example; they helped a property that had sat idle for more than two months sell quickly. (Of course professional staging and lighting should be considered, as well.)

5. If the agent double ends the sale, meaning represents both buyer and seller, can I negotiate a lower commission?

It depends on many variables. If your home has sold quickly and there wasn’t too much invested from a marketing perspective, it would certainly be reasonable to ask your agent. Your agent should be building a long-term relationship with you and the result should be a win-win for all parties.

]]>http://news.nationalpost.com/homes/top-five-tips-for-selling-a-home-in-a-competitive-market/feed/0gallery1fireplaceroommainafter-(1)Sam McDadi Real Estate Inc.Vancouver house that sold for $3-million in one day now faces bulldozer because it is too smallhttp://news.nationalpost.com/news/canada/vancouver-house-that-sold-for-3-million-in-one-day-now-faces-bulldozer-because-it-is-too-small
http://news.nationalpost.com/news/canada/vancouver-house-that-sold-for-3-million-in-one-day-now-faces-bulldozer-because-it-is-too-small#commentsTue, 13 May 2014 22:34:42 +0000http://news.nationalpost.com/?p=465652

VANCOUVER — In the latest weirdly expensive anomaly to hit the Vancouver housing market, a $3-million house that sold in just 24 hours will be torn down by its new owners.

“Most people look at these homes and it has nothing to do with the livability, the cuteness or the character [of the home], it is the economics of the lot,” said Wayne Hamill, a realtor with ReMax Select Properties.

“I’m not for or against what’s happening; it’s just the way it is.”

The four-bedroom house at 3981 West 35th Ave. was built in 1934 but is perfectly sound — its listing notes it has “lots of living space.” But it’s being torn down because its new owners consider it too small.

At 2,950 square feet, it’s well below the 5,300 sq. ft that can be built on the one-fifth of an acre lot.

Mr. Hamill first listed the property at 11:30 a.m. on Tuesday, May 6. The first offer came in 90 minutes later, and by the end of the workday two more had arrived.

When negotiations wrapped up next day before noon, the property sold for $3,038,000; $190,000 higher than its listed price.

“This all happened really fast, faster than I thought it was going to happen,” said Mr. Hamill, noting he has never even seen the inside of the house.

The sale was also a record-breaker. The real estate agent believes is it is the highest price ever paid purely for land in Vancouver’s upscale Dunbar neighbourhood, beating the previous record of $2,880,000.

In recent years, the bulldozing of perfectly functional multi-million dollar homes has emerged as one of the most visible symptoms of Vancouver’s red-hot real estate market.

Last year, for instance, a 50-year-old West Vancouver mansion in reasonably good condition was listed as a $38-million teardown on the expectation a buyer would divide its substantial waterfront lot into three parcels.

The year before, another West Vancouver teardown — a 1,400-sq.-ft 1954 rancher — sold for $1-million more than its $1.8-million asking price.

‘Anyone who’s purchased a home on the west side more than five years ago is sitting on a lottery ticket’

The teardown trend is driven in part by land-hungry developers looking for space to fill the insatiable demand for top-end Vancouver luxury homes. It also appears to reflect the size preferences of the market’s largely Chinese buyers.

“If it was a local buyer, there’s a high probability that it would be renovated, but to most Asian buyers, they’re looking for maximum square footage,” said Mr. Hamill.

“You wouldn’t buy a lot like this and build a 3,000 sq.-ft house; that would be crazy.”

The U.S.-based sellers of 3981 West 35th bought it for $739,000 in 2000. In only 14 years, the property gained $2,299,000 in value, or $450 for every day they owned it.

“They won the lottery,” said Mr. Hamill.

“Anyone who’s purchased a home on the west side more than five years ago is sitting on a lottery ticket.”

Even on the less-tony east side, most owners have found themselves sitting atop six-figure properties.

Last month, in East Vancouver, a three-bedroom century-old home, which briefly held the title of the city’s cheapest listed house, sold for $643,000, $44,000 above asking price.

Spring is home-buying season and if that’s what you’re doing, you need to be extra careful when checking out potential homes. You don’t want to buy a lemon.

There are two main options when buying a home: Either you buy new — a completely new build — or you buy resale.

If you’re buying a new home, make sure you check out the builder, their track record and speak to people who have bought one of their houses.

Ask if they were happy with their new home. Did they have any problems within the first year? Second year? What types of problems were they? Did they require major fixes, as a leaking basement would, or was there a problem with the HVAC, or maybe electrical issues? How helpful was the builder when it came to fixing the problem?

Just because a house is new doesn’t mean it won’t have issues. I’ve seen brand new homes, not even five years old, with major fixes that have nearly bankrupted the homeowner. A new home shouldn’t have major problems, but too many times it does.

If you’re looking at resale homes, be careful with ones that are being flipped. These homes are especially a problem because they are deliberately made to look good, but aren’t necessarily built or renovated to be good. They take advantage of homebuyers’ lack of knowledge about shoddy workmanship.

I don’t like flips because most of them are done with one purpose: To make a profit. In most cases, the flippers don’t care about quality because they won’t be living there. Their top priority is to sell fast to save on mortgage payments. And once it’s sold, any problems in the home become the responsibility of the new owners.

How do you know if it’s a flip? There are some warning signs, but again, it comes down to doing your homework. Most people think you need to be a pro to pick out the warning signs, but a lot of it is just common sense.

For example, if the homeowner tells you they just finished renovating the kitchen and bathroom — how much you want to bet they didn’t have enough money to do both renovations right?

A standard kitchen renovation done properly will cost at least $30,000. A bathroom reno can cost close to $20,000. If the only reason for renovating was to sell, I would be cautious about how the work was done. Good work takes time, and it isn’t cheap. Ask the homeowner details about the reno, such as how long it took to find the right contractor, set up the job, choose materials and for the work to be done. If all it took was a few weeks I would be cautious.

If a home looks like it’s been renovated, do a search for any permits on work completed. If changes were made to the plumbing, electrical or structure, permits would have been required.

Also, look for cheap materials, such as MDF for cabinetry or laminate flooring. Watch for bad trim and sloppy paint jobs — these are red flags for quick and cheap renos. When the trim is off or doesn’t line up you can bet that the workmanship isn’t top quality. If they fumbled on the finishes, they probably cut corners on the stuff behind walls and below flooring.

If windows were replaced, check to make sure that they are at least Energy Star rated. If the home has bad windows, you will pay for them for years in extra energy costs. And the cost of replacing them will run you at least $10,000. So if they need replacing, as a buyer, you need to know up front.

One last thing home buyers can look into is getting a home-history report on a property. Some home inspections even include this service as part of their basic home inspection.

A home-history report uses municipal, provincial and federal data to gather the most up-to-date property information. It’s an extra tool that helps protect a homebuyer, so you know exactly what you’re walking into.

A home-history report can tell you the home’s previous sales price, sale dates, building-permit information, information on structure or any previous insurance claims related to the property. You should know if a home you’re looking at had major water damage, flooding, a fire or damage from a natural disaster. Some home-history reports can even tell you if a house was ever used for illicit purposes, like a grow op or meth lab.

The more information you have on a property the better. You will know if the electrical or plumbing needs to be looked at by a professional to make sure it’s safe, or if the structure of the home was been modified or undermined. It puts you in a better position to buy the right home and buy it smart.

Watch Mike Holmes on Holmes Makes It Right on HGTV. For more information visit makeitright.ca.

]]>http://news.nationalpost.com/homes/mike-holmes-keep-an-eye-on-the-inspectors/feed/0stdHOLMES_PlanningReno_001.jpgBelts and boots – or baby? Giving up a third bedroom for a closet need not be riskyhttp://news.nationalpost.com/homes/decor/belts-and-boots-or-baby-giving-up-a-third-bedroom-for-a-closet-need-not-be-risky
http://news.nationalpost.com/homes/decor/belts-and-boots-or-baby-giving-up-a-third-bedroom-for-a-closet-need-not-be-risky#commentsWed, 29 Jan 2014 14:14:29 +0000http://life.nationalpost.com/?p=131384

Hi Jeffrey,

My boyfriend and I recently purchased a house. Not only is it our first house together, it’s the first house either of us has ever owned. Against the advice of family and friends we bought a bit of a fixer-upper. We are currently working on the main floor so we can have a functional kitchen up and running. The next phase will be the second floor that currently has three bedrooms and a bathroom. My question is, considering the third bedroom is essentially the size of a small nursery or office do you think we would be making a mistake by converting it to closet space? We have very little closet space in the house and both of us have a lot of clothes. My parents think it’s a bad idea for resale but then again we didn’t take their advice on the initial purchase to begin with. What do you think?

Jillian

Hi Jillian,

Congratulations on becoming homeowners. I admire you both for jumping into the deep end by choosing a fixer-upper as your first purchase. Not everyone would be as adventurous.

I assume from your email you have no need for a nursery or office and you are questioning the conversion of the third bedroom solely from a resale perspective. I don’t profess to be a real estate agent but I do know people (myself included) who would do exactly as you are undoubtedly about to do.

Sure, turning a three-bedroom home into a two-bedroom might sound less than appealing in terms of a real estate listing, but rest assured there are buyers who would ooh and aah over your walk-in closet.

You don’t mention whether your intention is to change the existing floor plan by closing off this bedroom and incorporating the space into your master bedroom or if you are going to leave as is and create a walk-in closet accessible from the second-floor hallway.

If you are leaving as is, the room could always revert back to a nursery or office should you (or a new homeowner) choose to do so in future. If you are sealing off the door from the hall and accessing the closet from your bedroom, the cost of this project will obviously escalate and that may be your deciding factor.

The closet in my inspiration photo above is by Janie Lowrie from Closet Theory (closettheory.com). Ms. Lowrie had the white paint-grade wood cabinetry custom built to her specifications with drawers, shelves, poles and cubbies providing ample storage and organization for her clients. It is, however, the small but significant addition of the chandelier and bench that turns a closet into a bonafide dressing room. Ms. Lowrie told me closets have become another room in the house as opposed to “just a place to store things.” Definitely something to keep in mind. Don’t just throw in a couple of rolling racks and a dresser and call it a walk-in closet. Think about how to best utilize the space to not only maximize storage but to make the room visually appealing. Wallpaper, lighting, rugs and small furniture pieces can help create your own customized dressing room.

After committing to your closet conversion you’ll have to decide whether to choose a built-in closet system or wall-mounted racking and shelves. The former will be pricier and more permanent, whereas the latter will enable you to convert back to a nursery or office more easily if need be. There are a number of closet companies who will provide a quote on designing and installing either system, or you can purchase closet systems from a big box store and do it yourself. Whatever works within your budget, be sure to approach it as another room in your house as Ms. Lowrie suggests. If space allows, think about luggage storage, or maybe a cedar-lined compartment for sweaters or even a washer and dryer. Customize the room for your own needs so that it serves you well.

I have a feeling that no matter what anyone tells you, Jillian, you’re bound to follow your own instincts. It’s easy to get caught up thinking about the resale of a home and forget about one’s own day-to-day living requirements, but you and your boyfriend obviously need additional closet space so, for what it’s worth, I think you’re making the right decision.

]]>http://news.nationalpost.com/homes/decor/belts-and-boots-or-baby-giving-up-a-third-bedroom-for-a-closet-need-not-be-risky/feed/0stdcloset-1.jpgBelts and boots – or baby? Giving up a third bedroom for a closet need not be riskyhttp://news.nationalpost.com/homes/decor/belts-and-boots-or-baby-giving-up-a-third-bedroom-for-a-closet-need-not-be-risky
http://news.nationalpost.com/homes/decor/belts-and-boots-or-baby-giving-up-a-third-bedroom-for-a-closet-need-not-be-risky#commentsWed, 29 Jan 2014 14:14:29 +0000http://life.nationalpost.com/?p=131384

Hi Jeffrey,

My boyfriend and I recently purchased a house. Not only is it our first house together, it’s the first house either of us has ever owned. Against the advice of family and friends we bought a bit of a fixer-upper. We are currently working on the main floor so we can have a functional kitchen up and running. The next phase will be the second floor that currently has three bedrooms and a bathroom. My question is, considering the third bedroom is essentially the size of a small nursery or office do you think we would be making a mistake by converting it to closet space? We have very little closet space in the house and both of us have a lot of clothes. My parents think it’s a bad idea for resale but then again we didn’t take their advice on the initial purchase to begin with. What do you think?

Jillian

Hi Jillian,

Congratulations on becoming homeowners. I admire you both for jumping into the deep end by choosing a fixer-upper as your first purchase. Not everyone would be as adventurous.

I assume from your email you have no need for a nursery or office and you are questioning the conversion of the third bedroom solely from a resale perspective. I don’t profess to be a real estate agent but I do know people (myself included) who would do exactly as you are undoubtedly about to do.

Sure, turning a three-bedroom home into a two-bedroom might sound less than appealing in terms of a real estate listing, but rest assured there are buyers who would ooh and aah over your walk-in closet.

You don’t mention whether your intention is to change the existing floor plan by closing off this bedroom and incorporating the space into your master bedroom or if you are going to leave as is and create a walk-in closet accessible from the second-floor hallway.

If you are leaving as is, the room could always revert back to a nursery or office should you (or a new homeowner) choose to do so in future. If you are sealing off the door from the hall and accessing the closet from your bedroom, the cost of this project will obviously escalate and that may be your deciding factor.

The closet in my inspiration photo above is by Janie Lowrie from Closet Theory (closettheory.com). Ms. Lowrie had the white paint-grade wood cabinetry custom built to her specifications with drawers, shelves, poles and cubbies providing ample storage and organization for her clients. It is, however, the small but significant addition of the chandelier and bench that turns a closet into a bonafide dressing room. Ms. Lowrie told me closets have become another room in the house as opposed to “just a place to store things.” Definitely something to keep in mind. Don’t just throw in a couple of rolling racks and a dresser and call it a walk-in closet. Think about how to best utilize the space to not only maximize storage but to make the room visually appealing. Wallpaper, lighting, rugs and small furniture pieces can help create your own customized dressing room.

After committing to your closet conversion you’ll have to decide whether to choose a built-in closet system or wall-mounted racking and shelves. The former will be pricier and more permanent, whereas the latter will enable you to convert back to a nursery or office more easily if need be. There are a number of closet companies who will provide a quote on designing and installing either system, or you can purchase closet systems from a big box store and do it yourself. Whatever works within your budget, be sure to approach it as another room in your house as Ms. Lowrie suggests. If space allows, think about luggage storage, or maybe a cedar-lined compartment for sweaters or even a washer and dryer. Customize the room for your own needs so that it serves you well.

I have a feeling that no matter what anyone tells you, Jillian, you’re bound to follow your own instincts. It’s easy to get caught up thinking about the resale of a home and forget about one’s own day-to-day living requirements, but you and your boyfriend obviously need additional closet space so, for what it’s worth, I think you’re making the right decision.

A city plan to build affordable rental units inside a waterfront condo won the unanimous support of a municipal committee Tuesday, and the ire of Mayor Rob Ford, who deemed the use of prime real estate for such a venture “ridiculous.”

City council has already determined that 20% of all residential units in the new East Bayfront neighbourhood be affordable rentals. This preliminary proposal is to construct about 71 units — including some with lake views — at a cost of $22.5-million, in a Hines and Tridel development in that area.

As much as $15-million is expected to come from federal and provincial governments, with $7.5-million from a non-profit corporation chosen to lease or own and operate the affordable housing units. The city may also be required to pitch in, according to a staff report.

Councillor Ana Bailao, chair of the affordable housing committee, heralded the pilot project as a creative way to help address an affordable housing shortage. If approved, it speeds up construction, so that units that were 10 or 15 years down the line can break ground as early as 2015.

Peter J. Thompson / National PostCondos continue to be built at a rapid pace in Toronto.

“You can’t build Toronto by having ghettos of people. By saying, ‘you know what, you’re not good enough to live on the waterfront,” she said.

But Mayor Ford was “split” on the issue, declaring “you don’t use your waterfront prime property for affordable housing.” His brother, Councillor Doug Ford, wondered if the city might be able to build more units for the same price elsewhere.

“Number one, who’s going to draw the names of the 50 or 75 lucky people that are going to live on the lake? How much are these units going to cost?” he asked.

Tuesday’s vote at the affordable housing committee was just the first hurdle for the proposal and an expression of support in principle, since staff must return with a more detailed agreement.

Next month, the matter will go before Mayor Ford’s executive and eventually city council.

We’re really happy we can support different income groups to live at Bayside because the whole purpose of this revitalization is to make sure that the city is fully integrated with Toronto’s waterfront

City staff told councillors Tuesday that the $22.5-million price tag is strictly for construction costs, and that the units would be designed with a “modesty standard” in mind. Affordable housing residents would have a separate, less glitzy entrance, for example, and their own amenities. The one-, two- and three-bedroom affordable housing units are also larger than condos; rent will be 20% less than the average market rate.

Councillor Pam McConnell, who represents the area, suggested the mayor’s objections may be based on misinformation. “Perhaps he was taken aback because it looked like we were buying condominiums somehow. That’s not the case,” she said following the vote. “All we have done today is to use some of the federal money that is flowing right now to accelerate this particular project.”

Samidha Thakrai, a director at Hines, said if everything goes according to plan, condo units will go up for sale early next year. “We’re really happy we can support different income groups to live at Bayside because the whole purpose of this revitalization, which we completely support, is to make sure that the city is fully integrated with Toronto’s waterfront,” she said.nalcoba@nationalpost.com
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